Selling Covered Calls on $MSTR | Complete Guide and Strategy for Income

[@NithusezniSezni]

Soleil here, after watching I can definitely cosign the information presented. And thanks for the shout out. Great job explaining the trade offs between income and limiting upside. I also agree that I think the upside will mostly outperform cc strategy over the next year, and I'm selling just enough to pay the bills while looking for strategic opportunities to sell more like spikes in implied vol (after rallies). I had already been following your channel so this was a nice surprise when someone from my live told me about it. 💪

[@zerodaystoexpiryonspx2751]

I am enjoying your video's mate. Not sure what happened yesterday, you had an upload that was blank.

[@bitcoinnotcrypto]

Great to have additional insights here Soleil, thanks for the comment. Selling into spikes of implied vol is a great way to get an edge, more premium plus higher likelihood of a pullback.

[@NithusezniSezni]

@@zerodaystoexpiryonspx2751 yeah I was able to recover it from the cloud. Will reupload manually.

[@NithusezniSezni]

@@bitcoinnotcrypto 💪💪💪

[@ronatola]

Hey @NithusezniSezni , nice to see you here. I just got off the TrueNorth call you were on. I'm interested in these Covered Calls and as BNC says you are a great resource. I see you have many many vids on your channel. I don't see a 'for dummies' playlist. What would you recommend I watch first? Besides this vid of course which was great. I am retiring soon (like you) and hold MSTR shares but am looking to supplement my income, and want to see if I can put my MSTR shares to work, as Jeff said with a monthly yield of around 2%?

[@snewogerg]

I have been selling covered calls on my shares since August. I only recommend selling covered calls for this underlying for only the most seasoned covered call seller. I have not lost a single share selling calls on $MSTR, and I sell them weekly.

[@NithusezniSezni]

@@snewogerg 💪💪💪

[@bitcoinjesus420]

My man!! I’ve been doing as a hedge to my fat btc stack only I use BITX. I’ve been crushing…its usually 3-5% on the weekly or two week calls. And it’s cheaper than micro strat

[@reidbrown7841]

Very well structured explanation. You clearly know what you're talking about. Great video.

[@mkmstillstackin]

Very good, clear, explanation, Thanks! I tried this for the very first time early this week, for a small trade, & actually netted a profit. I sold the 1 week MSTR cc's on Mon. with a way out of the money strike and bot back on Tues. for about a 60bps gain, netting about $1.6k. I pretty much got lucky though as it so happened the MSTR price continued selling off right after I opened the trade. That plus the theta decay, really reduced the value of the contract fairly quickly. I was sweating the whole time though and eager to close out asap. whew! Lol The scenario you described at min 17:30 seems to describe my trade perfectly.

[@ST5S5]

I have a core MSTR position that I want to keep for a long time but I trade with covered calls around it, so I’ll buy an additional 100 shares to sell a covered call against. Something that’s important to note though is that you have to make sure your brokerage settings are Last In First Out, so that if shares get called away, the recently purchased shares are the ones that are called away instead of the shares that have been owned for a while, which would create a large lax liability

[@adamcbrewer]

More videos on this topic please, including strategies for when you want to try keep the stock long term.

[@xr200honda6]

I've been selling short dated above all time highs and adding partial shares to stack and hodl let's go BTC and saylor

[@bstomp]

Very good job describing the basics for mstr

[@zerodaystoexpiryonspx2751]

Hi, thanks for the video. I am doing a similar strategy only I use LEAP's instead of purchasing shares outright. Less capital intensive, however the upside is less depending on delta the LEAP has. I did have one comment - where you say you don't want to have theta decay when selling options, I would argue that is exactly what you want when selling options. Theta decay works in your favour when selling, and against you when buying. Cheers,

[@bitcoinnotcrypto]

Nice Strat, a synthetic call option basically with the leap. I'm pretty sure I said that you do want to sell close to expiry calls because theta decay works for you as a seller, if I didn't I mis spoke.

[@mfletch2251]

This has been my strategy to the T

[@bitcoinnotcrypto]

Any experience with having your cc exercised?

[@AllAboutBendOregon]

New guy here.. Clarification: "in the money" means the price has exceeded the strike price, and the CC holder will capture the premium AND have their shares called away at the strike price. "Out of the money" means you keep the premium and your shares, right?

[@bitcoinnotcrypto]

Yes!

[@julesgosnell9791]

very helpful - thx

[@shaunbusuttil5188]

Great video! A question though: given that most contracts expire out of the money, why do people buy them, especially since they have to pay a premium? Who buys these? If you sell one, is it automatically bought? Thanks again for the amazing vids! :)

[@AllAboutBendOregon]

Another clarification: Do you have to wait for expiration? OR, to protect yourself from getting your shares called away, can you close the position early once you're "up" in the position?

[@bitcoinnotcrypto]

You can close at any time

[@AllAboutBendOregon]

@@bitcoinnotcrypto Do you have a tutorial video on the pros and cons / advantages and disadvantages of how how to do this and the thought process behind each? This is an area of confusion for me :) Thank you!

[@bitcoinnotcrypto]

@@AllAboutBendOregon I haven't made any tutorials on that yet. The channel "in the money" has really good beginner tutorials on selling covered calls.

[@ramlist1]

Grt informative vid....apologises but worthwhile for me to ask; any chance u can go into more details pls...by taking ur strategy & walking thru ur process, wat tools ur using, any TA...wat u want to look for in the greeks, i want to do this as i'm hoping to retire by EOY and would like to take up option trading with part if the MSTR / TSLA shares. thx again for wat u do!

[@MrMountain707]

Selling puts is great if you are looking to add to your position.

[@MatthewMarks-k4m]

Great content! Thanks! How does all this compare to trading MSTU/MSTX/MSTY?

[@bitcoinnotcrypto]

kzbin.info/www/bejne/rnvZmoh6opuirZY

[@traviselectricalservices4532]

Is .50 bid price with a .20 delta 30 days out, considered a good covered call option? If not, what would be a good bid price to delta ratio?

[@mdwilliams79]

If you want to keep MSTR in the hopes of the stock’s further appreciation, but write covered calls to make income from the premiums, then write way out of the money and nearer in expiration dates.

[@johnanon658]

Why?

[@stuartfreeman98]

@@johnanon658Because it significantly lowers the chance of having the shares called away from you. In exchange for that, you’ll be taking in a lot less premium than selling closer to the money or further out in time. For a volatile stock like MSTR, I would recommend this, because it can easily blow by your strike price, and then you’ll either need to roll the option, or lose the shares.

[@xr200honda6]

Stay short dated stay above 150 billion market cap valuation. next few months bump those numbers up to 175-200 billion market cap.

[@stevenwall1964]

So I have a dumb question. As an easy example If I own 100 shares of MSTR or any stock and the price is now $400 for example; if I sell a covered call at a strike price of $500, I then get the "juice" and if the stock goes up to the $500, I can get it called away. And so MSTR bulls always claim that as a big risk to lose their shares - HOWEVER if I did not want to lose my shares - if the stock does run from $400 to $500 I have the "juice" and I have the gain between $400 and $500 so could I not just buy the stock back at $500 or as close to it as possible if I want to keep my shares? Am I thinking about that wrong? It seems like if I did that over and over, sometimes the stock would never hit the strike price so I get to keep the "juice" and sometimes I may get the stock called away - - but then I get the juice and the gain - - and in those cases I could just buy back in. That seems like a good process; am I messed up here?

[@bitcoinnotcrypto]

You're right except that the price won't stop exactly at 500. It could go to 600, then your shares are called away at 500, and you have to pay 100 per share more to buy back your original amount of shares. Or wait and hope it goes back down before buying back.

[@stevenwall1964]

@@bitcoinnotcrypto Hey thanks for the quick answer I appreciate it.

[@SwetripsDk]

Is is it 2 different things if you buy the Stock or that convertible bond? Or is the convertible Bond the Stock ?

[@johnanon658]

Stock is jusbshares. Convertible bond is a bond that has an option at expiration for holder to either get his cash back, OR to buy so many shares at a particular price. Theory is, in 5 yrs, that share price will be steeply discounted to what will be the cirrent market price

[@SwetripsDk]

@ so when you buy the Stock.. that is a share? And when you see the Mstr tracker.. 0,00017 btc and its times 2,3 that gives you the Price of the Stock.. so you own some btc or at least some value of btc? When you buy a Stock ?

[@StephenMcDowall]

.20 delta, 1 week out, $100 higher strike. Winning

[@jc7887]

So...let me know if my thinking is correct.....I am selling weeklies on MSTR. I am ATM 400 for this Friday so if it keeps pumping, I will need to roll to an even or credit. Then isnt it simply a matter of waiting it out, to ensure I get both premium and share price appreciation? If it does what MSTR always does, it should predictably fallback and contract becomes worthless and I pocket the premium I have been rolling forward since I am only rolling with a credit or even. OR, I eventually just let it go at some crazy price if it gets too far away from me. Am I thinking about this correctly? Just keep rolling forward for even or a credit and wait for the pullback, so the premium deflates and I cash out?

[@bitcoinnotcrypto]

Yes that's right, you can roll and wait and close it even if it falls way out of the money again.

[@Shark3y22]

Do you see the volatility staying high for the next 5-10 years? I've never done options but want to learn. I believe volatility helps selling options though so hopefully it stays?

[@romancarp6427]

Can the options be execited only at maturity or throughout their duration?

[@bitcoinnotcrypto]

They could be exercised at anytime but usually aren't. if they go way in the money people usually just sell it to realize their profit. eventually though if it's in the money it will get exercised.

[@romancarp6427]

@ thank you

[@rstallings69]

i second his reply,

[@kimioapps3536]

Oddly enough this doesnt work on some brokerages...they deem a covered call on risky intruments like MSTR more dangerous than a cash secured put. Odd

[@ShaneTrammel]

The QR code did not work

[@bitcoinnotcrypto]

Means it was scanned by someone else. The first person to scan it gets the sats

[@bitcoinnotcrypto]

There's a new one in every new video

[@10411392]

I do mstx which is 2x of that :p

[@bitcoinnotcrypto]

@@10411392 do you sell covered calls on it?

[@389293912]

90% expire worthless implies a lot of suckers buy these calls. Why do so many people do this losing trade? (Buying calls)

[@notan3144]

Leverage. They are a fraction of the underlying stock price. If it works, you'll earn lots relative to holding the underlying.

[@larry33bird1]

Cuz they think they are the 10%

[@InvestmentAdviceConsultantNI]

This game only works when share price is rising

[@darthbrooks4933]

That’s when you just sell puts to offset

[@InvestmentAdviceConsultantNI]

@darthbrooks4933 what if price does not hit do u lose money

[@bitcoinnotcrypto]

This strategy works best when trading sideways. Yes you want to sell covered calls on a up day, but you can still make this strat work on a stock that goes down.

[@InvestmentAdviceConsultantNI]

@@bitcoinnotcrypto I read it now I think 100 share to do in UK which is big money to do it

[@rstallings69]

nope you gain on the covered call but lose on the shares its a hedge

[@rstallings69]

i tried it twice lately dodnt work out well due to its pumping

[@johnanon658]

Hows that? You had to sell the underlying?